GATE Humanities and Social Sciences - Economics Practice Quiz

Question 1

For a production function Q = f(L, K), the marginal product of labour at a given input combination is best defined as:

Accepted Answer

The additional output obtained from a one-unit increase in labour, holding capital constant

Question 2

Suppose total product of labour rises from 100 units to 118 units when labour increases from 5 workers to 6 workers, with capital fixed. The marginal product of the 6th worker is:

Accepted Answer

18

Question 3

A production function is given by Q = L^0.8 K^0.5. Which statement is correct?

Accepted Answer

It exhibits increasing returns to scale because the sum of exponents exceeds 1

Question 4

Suppose Q = f(L, K) is twice differentiable. Diminishing marginal returns to labour, holding capital constant, requires which condition?

Accepted Answer

∂²Q/∂L² < 0

Question 5

A firm’s production function is Q = min{2L, 3K}. If L = 6 and K = 5, then output is:

Accepted Answer

12

GATE Humanities and Social Sciences - Economics

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Production Function and Returns Fundamentals — Free GATE Humanities and Social Sciences - Economics Quiz